When someone shares with you something of value, you have an obligation to share it with others.
Friday, 29 January 2010
Japan’s exports rise but reliance on China a worry
Japan’s exports in December rose from a year earlier for the first time since before the financial crisis hit, but a rising yen and a growing reliance on Chinese demand may bode ill as Beijing looks to tighten monetary policy.
Japan’s exports rise but reliance on China a worry
Beijing policy may also hit Korea
Reuters in Tokyo 28 January 2010
Japan’s exports in December rose from a year earlier for the first time since before the financial crisis hit, but a rising yen and a growing reliance on Chinese demand may bode ill as Beijing looks to tighten monetary policy.
The bigger than expected 12.1 per cent rise in exports came largely from a jump in demand from Asia, which took in more than half of Japan’s total exports in the month.
“As Chinese authorities are trying to rein in overheating in the economy, export growth will probably slow down a bit,” said Hiroshi Watanabe, senior economist at Daiwa Institute of Research.
Current account data from South Korea also pointed to China underpinning regional export recovery, which may sputter if Beijing tries to cool off its economy.
Japan’s export strength - the benefits of which have had little impact on households or the domestic sector - looks likely to keep the economy on the path to recovery for now.
“Japan’s economic growth is likely to accelerate towards the end of this year, reducing the possibility of the BOJ taking further easing measures,” said Kyohei Morita, chief Japan economist at Barclays Capital.
China replaced the United States as Japan’s biggest export destination for the first time last year.
Exports to China rose 42.8 per cent on the back of strong growth in the country, which grew 10.7 per cent from a year earlier in the three months to December.
Financial markets have been spooked by worries that growth in Chinese demand could slow as Chinese authorities start pulling in the reins on loans and liquidity to stave off inflationary pressures.
Exports to the European Union also posted their first annual rise in 17 months. In contrast, shipments to the US fell 7.6 per cent, a sign that improvements in the global economy remained uneven.
“Most countries around the world are seeing their economies recover but improvements in advanced economies remain fragile,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “We can’t rely too much on strong growth in those countries, so Japanese exports will continue to focus on shipments to Asia.”
Data released from South Korea shows that Asia’s fourth-biggest economy jumped more than 50 per cent in December from the previous month as exports gained 10 per cent, the fastest growth in 10 months.
That helped the overall current account surplus triple to a seasonally adjusted US$3.5 billion from a revised US$1.17 billion in November.
South Korea’s surplus is expected to narrow as imports rise, due to a recovery in domestic demand as well as a low base effect, while monetary policy tightening in China will likely curb export growth, analysts said.
“As developed economies are still in trouble, we have to rely on China. And with China tightening, exports will inevitably grow slower,” said June Park, an economist at Woori Investment and Securities.
About half of South Korea’s gross domestic product comes from exports and China, its biggest market, accounts for about a quarter of South Korea’s overseas sales.
Seoul data also shows the Korean economy lost momentum by the end of last year due to waning government spending.
1 comment:
Japan’s exports rise but reliance on China a worry
Beijing policy may also hit Korea
Reuters in Tokyo
28 January 2010
Japan’s exports in December rose from a year earlier for the first time since before the financial crisis hit, but a rising yen and a growing reliance on Chinese demand may bode ill as Beijing looks to tighten monetary policy.
The bigger than expected 12.1 per cent rise in exports came largely from a jump in demand from Asia, which took in more than half of Japan’s total exports in the month.
“As Chinese authorities are trying to rein in overheating in the economy, export growth will probably slow down a bit,” said Hiroshi Watanabe, senior economist at Daiwa Institute of Research.
Current account data from South Korea also pointed to China underpinning regional export recovery, which may sputter if Beijing tries to cool off its economy.
Japan’s export strength - the benefits of which have had little impact on households or the domestic sector - looks likely to keep the economy on the path to recovery for now.
“Japan’s economic growth is likely to accelerate towards the end of this year, reducing the possibility of the BOJ taking further easing measures,” said Kyohei Morita, chief Japan economist at Barclays Capital.
China replaced the United States as Japan’s biggest export destination for the first time last year.
Exports to China rose 42.8 per cent on the back of strong growth in the country, which grew 10.7 per cent from a year earlier in the three months to December.
Financial markets have been spooked by worries that growth in Chinese demand could slow as Chinese authorities start pulling in the reins on loans and liquidity to stave off inflationary pressures.
Exports to the European Union also posted their first annual rise in 17 months. In contrast, shipments to the US fell 7.6 per cent, a sign that improvements in the global economy remained uneven.
“Most countries around the world are seeing their economies recover but improvements in advanced economies remain fragile,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “We can’t rely too much on strong growth in those countries, so Japanese exports will continue to focus on shipments to Asia.”
Data released from South Korea shows that Asia’s fourth-biggest economy jumped more than 50 per cent in December from the previous month as exports gained 10 per cent, the fastest growth in 10 months.
That helped the overall current account surplus triple to a seasonally adjusted US$3.5 billion from a revised US$1.17 billion in November.
South Korea’s surplus is expected to narrow as imports rise, due to a recovery in domestic demand as well as a low base effect, while monetary policy tightening in China will likely curb export growth, analysts said.
“As developed economies are still in trouble, we have to rely on China. And with China tightening, exports will inevitably grow slower,” said June Park, an economist at Woori Investment and Securities.
About half of South Korea’s gross domestic product comes from exports and China, its biggest market, accounts for about a quarter of South Korea’s overseas sales.
Seoul data also shows the Korean economy lost momentum by the end of last year due to waning government spending.
Post a Comment